INDIA – Online food delivery platform Swiggy is planning to expand its restaurant financing program in its latest attempt to boost growth in the food delivery segment and wade off stiff competition from rival Zomato.
“The NBFCs (non-banking finance companies) will soon facilitate more solutions like pre-approved loans to enable our partners to gain easier and quicker access to capital, driving even more growth for their businesses,” said Swapnil Bajpai, vice president – supply at Swiggy.
Swiggy launched the financing program in 2017 and recently reported that it has enabled disbursements of over Rs 450 crore (US$54 million) to over 8,000 restaurants during its operation period.
The program helps restaurants access financial products such as term loans and credit lines from lending firms including Indifi, Incred, PayU, IIFL, and FT Cash.
Of the 8,000 restaurants that have accessed these products, 3,000 availed loans in 2022, according to the food delivery platform.
Bengaluru-based Swiggy has been in a pitched battle with listed rival Zomato to gain food delivery market share.
In 2020, Swiggy reigned supreme with a 52 percent market share. In the three years since, it has ceded space to its arch-rival, with Swiggy’s market share falling to 45 percent.
According to a June research note by brokerage firm JM Financial, Zomato’s market share currently stands at 55 percent, a marginal rise from the 52 percent recorded in 2021.
Data from Swiggy’s largest shareholder, Prosus, showed that its gross merchandise value (GMV) was at US$2.6 billion in FY23, as opposed to Zomato’s US$3.2 billion during the same period.
The two also slug it out in the quick-commerce space — through Swiggy Instamart and Zomato-owned Blinkit.
Swiggy is itself eyeing a public listing, with news reports in late August suggesting the company had initiated talks with bankers to assess its valuation before an expected 2024 initial public offering, after halting the process for months due to weakness in the markets.
On August 28, US-based asset management firm Baron Capital Group marked up its valuation of Swiggy by 34% to US$8.54 billion.
Prosus, Swiggy’s biggest shareholder, however recently revealed that its loss from shares in the food delivery platform had shot up to $180 million in fiscal year 2023 (FY23) from US$100 million in FY22.
